The Commerce and Industry Minister Piyush Goyal launched the Startup India Seed Fund Scheme on April 19 2021 to handhold and financially support early-stage startups across 300 incubation centres. Spare a few minutes in knowing about the government’s initiative….
To provide financial assistance to the startups for prototype development, proof of development, market-entry, commercialization, and product trials.
The scheme aims to support the domestic entrepreneurs as well as their business ideas that often are not able to take off because of the absence of critical capital at an early stage.
What Piyush Goyal said?
The scheme will “secure seed funding, inspire innovation, support transformative ideas, facilitate implementation and start a startup revolution”. He said the scheme will create a robust startup ecosystem, particularly in non-metros, “which are often deprived of adequate funding”. The minister said he would like to encourage innovators from rural areas to come forward and benefit from this scheme.
The Startup India Seed Fund Scheme was earlier announced by PM Modi in January 2021to help budding entrepreneurs and startups in pursuing their innovative ideas. The scheme will be implemented from April 1, 2021. It aims at supporting an estimated 3,600 entrepreneurs through 300 incubators.
The Startup India Seed Fund Scheme will help in ensuring adequate availability of funds, especially to the startups with good ideas in various fields.
The scheme will help in securing seed funding, support the transformative ideas, will inspire innovation, and will also facilitate the implementation of the ideas.
The scheme will help in creating a robust startup ecosystem in Tier 2 and 3 regions as these smaller towns are often not provided with appropriate funding.
The Department for Promotion of Industry and Internal Trade is launching the scheme to facilitate startup funding at an early stage. A total of Rs. 945 crore will be divided over the next 4 years in order to provide seed funding to the eligible startups. It will be done through eligible incubators across the country. An Expert Advisory Committee- EAC has been constituted by the Central Government. It will be responsible for the overall monitoring and execution of the government launched scheme. The incubators will be able to apply for funds through the online portal created by DPIIT.
Grants of up to Rs. 5 crores will be provided to the eligible incubators selected by the Expert Advisory Committee. The incubators selected by EAC will provide grants of up to Rs. 20 lakh for the validation of the prototype development, proof of concept, or product trials to startups. Further, under the scheme, up to Rs. 50 lakh will be provided to the startups for commercialization, market-entry, or scaling up through debt-linked instruments or convertible debentures.
There are over 41,000 startups in the country and 44% of these ventures are officially recognized. More than 5,700 startups are in information technology (IT), around 3,600 in healthcare and over 1,700 in agriculture. Despite the pandemic-led disruption, 11 startups turned unicorns in 2020, and over 30 today are valued at over $1 billion, he had said, comparing it to just four unicorns in 2014.
The way forward
The scheme will allow incubators to apply for funds through an online platform and an experts’ advisory committee has been created to execute and monitor the scheme.
Keywords: Piyush Goyal, startups, Chalgenius, early stage startups
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